Almost 400 Westminster households are likely to be shifted outside the borough when they are made homeless from new housing benefit caps, the council has estimated.

A Westminster council report states “homeless acceptances are forecast to increase by 480” as a result of the benefit level changes which will prompt the split between in-borough and out-of-borough accommodation to change from 70:30 in favour of in-borough to 20:80 in favour of out-of-borough by 2016.

As a result, 384 households would be found accommodation outside the borough as the council struggles to find appropriate housing within the price caps inside its borders.

The report says the total number of households affected by the benefit reduction is greater in Westminster than any other central London borough with more than 5,000 people losing out.

Westminster North MP Karen Buck said: “If a homeless household doesn’t have strong ties to the local community, I am fairly relaxed.

“But where a family may have employment or schooling in the area – or have family members that they support or receive support from – then it’s highly damaging for them to be shipped miles away. Central government has simply applied the housing benefit as a blanket rule without any exception.”

In the report the council predicts that numerous “households will be faced with moving home” with “a significant number subsequently making homeless applications to the council”.

Philippa Roe, Westminster council’s cabinet member for housing, says the 480 households will only be those who can’t be helped by other means.

The council says it will initially work with landlords to negotiate rents in the private sector, help people who have to move to find alternative accommodation, and provide advice and assistance .

It is also hoping to use its share of the government’s �10million Discretionary Housing Payment fund, although it says this will only be able to “assist a relatively small number of affected claimants”.

Cllr Roe said: “The properties we may need to find for larger families cost thousands of pounds per month in Westminster.

‘‘This is at a time when the government is seeking to reduce the �21billion housing benefit bill.

“The state should not be providing accommodation on the public purse that working people cannot afford themselves.”